‘6 months on, the government is still running the fallen regime’s playbook’: Debapriya Bhattacharya 

Six months in, how much of the sky of our economy is blue, and how much is still dark cloud?

The economic sky is a more prolonged affair; it does not change as quickly as the seasons, especially when there are structural problems inside the economy — how you raise the government's income, how you collect tax, how you keep up the quality of public spending, how much you must borrow to cover the deficit, and the accumulated pressures of social protection and the salary bill. 

To all of that has been added an uncertain external situation, and with it the heavy burden of subsidies, fuel above all. There is, in short, no shortage of challenges.

At budget time you set out three reservations. Do they still stand?

They stand, and I will repeat them. 

First, the budget's philosophy was good — I called it a thoughtful budget, and I have no objection there. 

Second, its fiscal framework is very weak. 

Third, to overcome that weakness, where resources are scarce, the way to raise efficiency is reform — and I found no roadmap for reform inside the budget. 

Six months on, I would add the energy situation: there was no roadmap there either, and no second line of protection, the redundancy you keep so that when one source fails you can turn to another. 

Almost nothing that has happened was unforeseeable — perhaps only what would occur at the Strait of Hormuz, and how far that would push up the subsidy bill. There was thought, but no structure.

Ministers now say they inherited a destroyed, fragile economy. Is that fair?

Then where is the document? Why are they saying it only six months later? When you cannot cope, you begin to shift the burden onto history. 

They needed a White Paper setting out exactly what state they received the economy in, and to build their programme and their reforms on that basis. They did not do it — I suspect out of a political hesitation about naming the problems of the interim-government period.

So, there is no data and no record. If someone comes now and says "this is what I inherited", I have no evidence for it. That is their first sin.

Is there any qualitative change in our politics, or in how power is exercised?

After six months, my feeling is that the fallen government's playbook is being followed, and it is showing clearly.

The number one person says many things, and they are admirable, but between the words and the reality of six months we already see a gap — whether the work is being done at that speed, and whether the possibilities have been used with reason.

You mean the prime minister?

His social conduct has made him widely admired — we have not seen such a prime minister before, and his personal popularity runs ahead of the government's. 

The question is how he converts that popularity into work, and how he compels or inspires the party through whom he must work. Now a reshuffle is being talked of. 

But if the people who could not deliver are replaced, is there any guarantee the replacements are abler? We have seen a bad minister dropped and a worse one brought in. And was the failure personal, or a limitation of the structure they worked in — a police force that could not function, a bureaucracy throwing up obstacles, party men at the grassroots still at their extortion and land-grabbing? 

Seat angels inside the same broken structure and they still cannot work. A reshuffle at six months is bold, and I congratulate it — the former leader never changed a decision, because it would have felt like a defeat.

Has any relief come at all?

Some. I can at least speak more openly than before. But after 17 years, able journalists like you now practise self-censorship — the government has not told you not to say a thing; you simply decide it may be wiser not to. We have moved from worrying about freedom of expression to worrying about freedom after expression.

Is Bangladesh under serious geopolitical pressure now?

The post-Trump situation is far more complex than under the fallen government. The Ukraine war has not ended, Gaza is what it is, there are doubts about China's role, and India's relations with its neighbours have deteriorated. Multilateralism itself — the UN, the WTO, the WHO — is in crisis, and one country tells another that Greenland, or Canada, is now its own. 

Bangladesh's geopolitics is, in the end, the politics of balance: our imports come chiefly from India and China, our export markets are Europe and America, our remittances from the Middle East, our foreign investment mostly from the West. 

You cannot be so friendly with one that the others take offence. The danger is that if this is treated as mere political push-in and push-out, the economy is pushed in and out with it — and investors begin to doubt our stability. There I see a coordination gap, a hesitancy, between our geopolitics and our economic management.

The Bangladesh-China-Myanmar corridor is back on the table. Should we take it?

Businessmen are very enthusiastic — the economic benefit is large and lead times fall — but the geopolitical pressure is real, and there are rival proposals, including one the Americans have pushed. No economic choice touched by geopolitics is ever quite safe. The government says Bangladesh's interest comes first; then ask what that interest is — a road through Myanmar, or the return of my Rohingya? 

They have just declared these people are not Rohingya but Bangalis. So the bargain must be: take back the Rohingya within a year, and then we will discuss the road. The Rohingya are our single biggest problem — more than a million, with 100 or 200 still arriving every month. I hope my government has the wisdom and the courage to strike that bargain.

Do our institutions have the capacity to seize the possibilities you describe?

This is the heart of it. The 2024 Nobel went to Acemoglu, Robinson and Johnson for showing how a society's political and economic institutions decide whether a nation grows rich or stays poor. Under the fallen government the institutions were extractive; growth still happened — GDP rose, big infrastructure was built — but institution-building was neglected. The question now is whether our politicians even grasp that institutions matter. 

If they think it enough to change a policy and seat their own people, while letting the grammar of institutional accountability go, they will fail. The clearest examples are banking, energy, tax administration and the quality of public spending. In six months I have heard words; I have not seen the work. There are signals, but no music.

Has the government begun to dismantle the machinery of the kleptocracy it inherited?

Let me answer as an economist. You did not reform in time; you built no roadmap in these six months, in energy or in banking. So now, with no money, no liquidity in the banks, and fuel to import, whom did you turn to? To people who do not carry a good name — and you will now share their bad name politically. 

If you do not take competent reform steps, surrender to the kleptocracy becomes inevitable, because for your factories, your imports, your bank money, your new investment, you will keep going back to the very people who ran ahead by hoarding money and sending it abroad. 

Six months on, how many of the properties pledged cheaply against bad loans have you seized and sold, through the legal process, to recover the money? Why not — when the power to make the law was also yours?

So where must the government turn first?

Think of the body. The heart is fiscal management — the government's revenue and expenditure. The two lungs are energy and banking, and if the lungs will not breathe, the heart cannot work either; the kidney is the tax system. Fix energy and banking, or family cards will not save you. 

Every year 200,000 to 250,000 people enter the labour market and need jobs, and the government's real turnaround is to restore the growth trajectory — which needs investment, jobs and reform, and this year's plans were made realistic. You cannot do everything; say so honestly. You are a legitimate elected government, born of an uprising, and you must have the courage to tell people the truth. The time for populism will come — there are still three years to the election.